CASSIDY TURLEY RESEARCH
U.S. EMPLOYMENT TRACKER February 2014
Job Growth Lousy, But So Is The Weather
BLS Employment Report
By Rebecca Rockey, Economist, and Kevin Thorpe, Chief Economist, U.S. Research
January 2014
113,000
The economic climate in the U.S. has been as volatile as the weather over the past two months. Despite strong economic data as we entered 2014, extremely cold weather and market reactions have suddenly diminished the optimism of many.
Change in total nonfarm employment
34,000
Office-using
21,000
Manufacturing
-12,900
A huge focus over the last month has been on the weak December employment report. The Bureau of Labor Statistics (BLS) showed growth in total nonfarm employment of only 74,000, which has since been revised to 75,000. November, however, was revised from 241,000 to 273,000, indicating that job growth towards the end of the year was not only strong, but above the monthly average of 194,000 for the year. Today, BLS reports show that January’s job growth was 113,000, a modest improvement, despite having the coldest average monthly temperatures on record since 1994. Positive trends in construction offset the December decline of 22,000, showing an increase in January of 48,000. Manufacturing, residential and nonresidential building, wholesale trade, business and professional services, hospitality and health care sectors all posted improved job gains this past month. The national unemployment rate declined to 6.6%, from 6.7%.
Retail
Job Growth Revisions Change in Total Nonfarm Payrolls, 000’s
There is no question that the latest string of economic data - from housing to manufacturing to employment - has been lousy. But nearly all agree that abnormal weather is the primary factor behind the seemingly out-of-nowhere slowdown in the U.S. economy. The fact is, most data series are seasonally adjusted, meaning that they attempt to eliminate seasonal variances so that people can make month-to-month comparisons. When the weather falls into a “normal historical range,” the seasonal adjustments work well. When the weather is abnormal, such as the adverse conditions introduced by the polar vortex, the seasonal adjustments inevitably fail to account for the atypical pattern. In other words, the severe weather has placed an artificially negative slant on nearly all of the economic data released in December and January.
Dec 2013
Oct 2013
Nov 2013
Sep 2013
Jul 2013
Pre-revision
Aug 2013
Jun 2013
Apr 2013
May 2013
Mar 2013
Jan 2013
Feb 2013
350 300 250 200 150 100 50 0
Post-revision
Source: BLS
To cut through the seasonal distortions and spot the true underlying trend, it is instructive to view the data through the lens of a six-month moving average. Taking this approach, the U.S. economy is creating a monthly average of 178,000 net new jobs, consumer spending is growing at an annual rate of 3.1% and the ISM manufacturing index has been a robust 60.6. It’s also worth noting that the Federal Reserve was seemingly unfazed by December’s weak employment figures, as it continued to taper its asset purchasing program—an indication that the Fed believes the long-term fundamentals in the broader economy are getting stronger. In general, the economic backdrop still indicates that commercial real estate fundamentals will continue to tighten in most markets across the country.
Office-using Employment Surpassed pre-recession levels
29500 29000 28500 28000 27500
Office-using, ths, SA
Source: BLS
Dec 2013
May 2012
Oct 2010
Jan 2009
Apr 2007
Jul 2005
Dec 2003
27000
Looking ahead. While we remain cautious of shaky equity markets and the possibility that the latest economic data could be signaling some underlying weakness, we remain optimistic that the economic expansion will continue at a stronger growth rate in 2014. Indeed, a lot about this recovery still looks very right. In the past week, we learned after revisions that real GDP grew at an annualized rate of 3.2% in the final quarter of 2013, driven by the largest increase in consumer spending in three years. Business confidence is now at an 11-year high; consumer confidence has held up; fiscal policy is less of a drag; and the Fed is now tapering because it generally likes what it sees. Commercial real estate fundamentals have been consistently tightening for three straight years. Although the past few weeks have allowed some doubt to resurface, the outlook remains upbeat.
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CASSIDY TURLEY RESEARCH
U.S. EMPLOYMENT TRACKER Employment Situation by Metro: Total Nonfarm*
OfďŹ ce-Using*
Industrial Sector*
Unemployment
(000s)
% Chg
(000s)
% Chg
(000s)
% Chg
2013
Atlanta, GA
59.0
2.5%
24.7
3.8%
3.3
0.8%
8.0%
Austin, TX
26.9
3.3%
9.0
4.7%
1.9
1.8%
5.3%
Baltimore, MD
25.6
1.9%
10.9
3.7%
-0.4
-0.3%
7.0%
Boston, MA
37.2
1.5%
14.4
2.1%
-2.1
-0.6%
6.1%
Charlotte, NC
22.2
2.6%
6.8
2.9%
3.7
2.5%
8.5%
Chicago, IL
55.3
1.3%
30.2
2.7%
8.0
0.9%
9.2%
Cincinnati, OH
8.3
0.8%
5.4
2.3%
2.4
1.2%
7.0%
Columbus, OH
11.6
1.2%
3.0
1.2%
3.4
2.3%
6.1%
Dallas, TX
99.1
3.3%
37.4
4.7%
10.1
1.8%
6.1%
Dayton, OH
-1.0
-0.3%
0.9
1.3%
-0.7
-1.0%
7.5%
Denver, CO
34.3
2.8%
12.7
3.5%
2.6
1.5%
6.7%
Detroit, MI
11.0
0.6%
3.3
0.7%
10.5
2.9%
9.6%
Edison, NJ
15.5
1.5%
3.6
1.4%
2.2
1.4%
7.9%
Fort Lauderdale, FL
16.1
2.2%
2.1
1.1%
2.2
2.3%
5.9%
Houston, TX
95.5
3.5%
17.3
3.0%
19.0
3.7%
6.2%
Indianapolis, IN
15.7
1.7%
3.7
1.8%
0.3
0.2%
7.4%
Kansas City, MO
8.4
0.8%
5.8
2.2%
1.4
0.9%
6.4%
Las Vegas, NV
18.4
2.2%
3.9
2.5%
0.2
0.2%
9.5%
Los Angeles, CA
62.2
1.6%
29.4
3.0%
-3.9
-0.5%
9.9%
Louisville, KY
13.8
2.3%
2.9
2.3%
4.1
2.9%
7.9%
Miami, FL
9.7
0.9%
4.6
2.0%
1.8
1.0%
8.7%
Milwaukee, WI
4.9
0.6%
0.3
0.2%
-1.2
-0.7%
7.3%
Minneapolis, MN
39.9
2.3%
7.2
1.6%
3.2
1.0%
4.9%
Nashville, TN
26.5
3.4%
10.6
5.8%
5.6
4.0%
6.5%
New York, NY
142.5
1.7%
28.2
1.2%
1.3
0.1%
8.0%
Newark, NJ
12.4
1.3%
2.3
0.9%
-0.9
-0.5%
8.4%
Oakland, CA
11.4
1.2%
1.6
0.7%
1.9
1.2%
7.4%
Philadelphia, PA
26.8
1.0%
8.4
1.2%
-1.3
-0.3%
8.1%
Phoenix, AZ
41.7
2.4%
11.4
2.5%
5.0
1.9%
6.8%
Pittsburgh, PA
12.5
1.1%
8.2
3.1%
0.6
0.4%
6.9%
Portland, OR
17.1
1.7%
5.2
2.3%
3.9
1.9%
7.3%
Raleigh, NC
8.2
1.6%
3.7
2.6%
1.8
2.9%
6.9%
Sacramento, CA
9.8
1.2%
2.4
1.4%
2.8
3.5%
8.6%
San Diego, CA
22.7
1.8%
5.9
1.9%
0.5
0.3%
7.4%
San Francisco, CA
26.5
2.7%
12.2
3.5%
2.0
2.0%
5.5%
San Jose, CA
27.0
3.0%
13.3
5.0%
2.2
1.0%
6.9%
Seattle, WA
42.1
2.5%
7.9
1.9%
8.7
2.7%
5.9%
St. Louis, MO
9.4
0.7%
0.7
0.2%
1.3
0.6%
7.2%
Tampa, FL
36.8
3.2%
12.0
3.8%
-1.3
-1.0%
7.0%
Washington DC Metro
37.1
1.2%
6.0
0.8%
0.7
0.5%
5.5%
West Palm Beach, FL
9.2
1.8%
2.0
1.4%
-0.6
-1.2%
7.2%
*Employment change, 2012 over 2013 Source: BLS
2 | Cassidy Turley
CASSIDY TURLEY RESEARCH
U.S. EMPLOYMENT TRACKER Employment Indicators By Company Size
U.S. Jobs Lost/Gained
U.S. Nonfarm Private Sector Job Growth, 000’s
Recession vs. Recovery, 000’s
Small (1-490
160
Medium (50-499)
Large (500+)
Professional and business services
140
Leisure and hospitality
120
Retail trade
100
Manufacturing Transportation and utilities
80
Financial activities
60 40
Construction
20
Information
0
-2500 Nov-13
Dec-13
-1250
Jan-14
0
Jobs Lost
Source: ADP National Employment Report
1250
2500
Jobs Regained
Source: BLS
Unemployment vs. Office Vacancy
Job Openings Total Nonfarm, (SA Millions)
18%
11.0%
4 3.5
10.0% 17% 9.0%
3 2.5
16% 8.0%
2
Confidence Growing to Seek New Employment
Sep 2009
Quit Rate, Total Nonfarm (SA, %)
Continuing Claims (mil)
Source: Employment and Training Administration
Dec 2007
Jan 2014
Dec 2012
Jan 2012
2
Mar 2006
3
Jun 2004
4
Sep 2002
5
2.6 2.4 2.2 2 1.8 1.6 1.4 1.2 Dec 2000
6
695 645 595 545 495 445 395 345 295 245 Mar 2011
Nov 2013
Quit Rate
U.S. Nonfarm Private Sector Job Growth, 000’s
May 2010
Nov 2013
Source: BLS
Jobless Claims
Jul 2009
Sep 2011
Sep 2009
Dec 2007
Job Openings
Source: Cassidy Turley Research; BLS
Initial Claims (ths.)
Aug 2011
Office Vacancy Rate
Mar 2006
Jun 2004
Q4 13
Q3 12
Q3 11
Q3 10
Q4 09
Unemployment Rate
Dec 2000
15%
7.0%
Sep 2002
1.5
Source: BLS
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U.S. Research • Rebecca Rockey, Economist • Kevin Thorpe, Chief Economist • Tel: 202.463.2100